2022 ONSC 5634
COURT FILE NO.: CV-21-00665329-0000
DATE: 20221004
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
SIGMA CONVECTOR ENCLOSURE CORP.
Plaintiff
- and –
FLUID HOSE & COUPLING INC., JOE PASTERNAK also known as JOSEPH PASTERNAK, BARBARA PASTERNAK AND TAIZHOU CHUANGJU VALVE CO. LTD., also known as 台州创巨阀门有限公
Defendants
Robert C. Harason for the Plaintiff
Dana L. Eichler for the Defendants Fluid Hose & Coupling Inc., Joe Pasternak and Barbara Pasternak
In writing
PERELL, J.
REASONS FOR DECISION - COSTS
[1] This is a costs endorsement.
[2] Sigma Convector Enclosure Corp. sues Fluid Hose & Coupling Inc. (“Fluid Hose”), Joe Pasternak, Barbara Pasternak, and Taizhou Chuangju Valve Co. Ltd. (“Taizhou”) for $3.0 million.
[3] The Statement of Claim asserts claims of: (a) breach of contract; (b) misrepresentation; (c) inducing breach of contract; (d) negligence; (e) piercing the corporate veil; and (f) an oppression remedy pursuant to s. 248 of the Ontario Business Corporations Act.[^1]
[4] Pursuant to Rule 21 of the Rules of Civil Procedure,[^2] the Pasternaks and Fluid Hose moved to have the oppression claim struck and the personal claims against the Pasternaks struck for not showing a reasonable cause of action.
[5] On the Pasternaks’ and Fluid Hose’s motion to strike, I ordered that except for the oppression remedy claim, all the personal claims against the Pasternaks be struck without leave to amend. On the Pasternaks’ and Fluid Hose’s motion, I dismissed the request to strike the oppression remedy claim against Fluid Hose and the Pasternaks.[^3]
[6] I directed that Sigma shall have thirty days to deliver a Fresh as Amended Statement of Claim in accordance with the Reasons for Decision; i.e., removing the claims it is not pursuing, deleting the personal claims against the Pasternaks other than the oppression remedy claim, deleting the piercing the corporate veil allegations, and adding the oppression remedy allegations contained in the email messages of November and December 2021.
[7] I directed that if the parties cannot agree about the matter of costs, then they may make submissions in writing beginning with Sigma’s submissions within twenty days of the release of the Reasons for Decision, followed by the Defendants’ submissions within a further twenty days. I alerted the parties that given the divided success on the motion, my inclination was to order costs in the cause.
[8] The parties could not agree about the matter of costs, and they made written submissions.
[9] Sigma submits that it was substantially successful in resisting the Pasternaks’ and Fluid Hose’s motion to strike. Sigma claims costs on a substantial indemnity basis of $49,782.15, all inclusive payable within 30 days. Or, Sigma claims costs of $33,188.10, all inclusive, on a partial indemnity basis payable within 30 days. Alternatively, Sigma submits that the costs of the motion be in the cause fixed at $40,000, all inclusive.
[10] The Pasternaks and Fluid Hose submit that they were the substantially successful party. They request partial indemnity costs of $57,942.74, all inclusive, payable within 30 days. Or, the Pasternaks and Fluid Hose request that the partial indemnity costs of their motion be payable in the cause and fixed at: (a) $38,874.78, if they are successful in the cause; or (b) $27,927.95 payable to Sigma, if the Pasternaks and Fluid Hose are unsuccessful in the cause of the oppression remedy claim.
[11] That both parties assert that they were the substantially successful party on the motion to strike confirms my thought that success on the motion was equally divided. Truth be told, neither party was substantially successful. Success on the motion was divided. Visualize:
a. The Pasternaks and Fluid Hose, the moving parties, are represented by the same lawyers. The Pasternaks were always going to be involved in the litigation as witnesses and to give instructions for Fluid Hose. The Pasternaks and Fluid Hose wished to remove all aspects of personal liability of the Pasternaks and to have the oppression remedy claim dismissed. They failed in that effort. They failed because the oppression remedy claim shall continue against the Pasternaks and their corporation. The Pasternaks and Fluid Hose had divided success. They were not substantially successful.
b. Sigma, the responding party on the motion to strike, abandoned some of the personal claims against the Pasternaks in the face of the Pasternaks’ and Fluid Hose’s motion to strike, and Sigma had the rest of the personal claims struck, save for the oppression remedy claim. Sigma had to labour to save the oppression remedy claim by seeking amendments to its Statement of Claim. Sigma had a divided success. Sigma was not substantially successful.
[12] After considering the costs submissions of both parties, I thought seriously of making no order as to costs. However, ultimately, I am not persuaded that my initial inclination to order costs in the cause was wrong.
[13] I fix the costs at $40,000 payable in the cause. Those costs are on a partial indemnity basis. I am not persuaded that a punitive costs award is called for in the circumstances of the immediate case.
[14] Order accordingly.
Perell, J.
Released: October 4, 2022
2022 ONSC 5634
COURT FILE NO.: CV-21-00665329-0000
DATE: 20221004
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
SIGMA CONVECTOR ENCLOSURE CORP.
Plaintiff
- and –
FLUID HOSE & COUPLING INC., JOE PASTERNAK also known as JOSEPH PASTERNAK, BARBARA PASTERNAK AND TAIZHOU CHUANGJU VALVE CO. LTD., also known as 台州创巨阀门有限公
Defendants
REASONS FOR DECISION - COSTS
PERELL, J.
Released: October 4, 2022
[^1]: R.S.O. 1990, c. B.16.
[^2]: R.R.O. 1990, Reg. 194.
[^3]: Sigma Convector Enclosure Corp. v. Fluid Hose & Coupling Inc., 2022 ONSC 4371